Feasibility study –
Environmental project
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Client
An overseas investor in greenhouse gas conversion & ozone layer protection at a Dubai landfill.
Assignment
Approach
Benefits to the client
Bottomline
Feasibility study for a greenfield investment in a large landfill gas conversion BOT project in Dubai, working alongside the client’s climate consultants. In the absence of any identified customers, its only source of revenue was by sale of carbon credits earned from the United Nations Framework for Climate Control and Change under its Clean Development Mechanism.
• Worked within the guidelines of the UNFCCC’s CDM and independently validated the technical specifications of the project
• Assisted the client with the financial inputs section of the CDM application
• Estimated the capital expenditure and the ongoing operating costs through the concession period
• Developed a revenue model under multiple price evolution scenarios of the carbon credits (CERs) market
• Developed a financial model for the project, complete with break-even analysis and a range of what-ifs.
Our assignment:
• Helped establish that there was a clear business/investment case
• Identified the key profitability drivers and the critical assumptions that could impact the potential returns materially
• Helped identify and quantify certain key risks such as: accuracy of technical assumptions, timing risks and modelling risks.
The Client was able to make the investment decision with clarity and confidence, especially considering the innovative nature of the project.